European hoteliers hope December’s sublime performance will carry into and throughout 2020. The year ended on a strong note for hotels, represented by a fourth consecutive month of year-over-year profit growth on a per available room basis. GOPPAR soared in the month, finishing 9.8% above the same period in 2018 and marking its greatest YOY increase of the year, according to data from HotStats.
December was a month of record growth rates. Occupancy (up 2.3 percentage points), average rate (up 3.2%) and RevPAR (up 7.1%), all marked their greatest increases in 2019. Further fueled by a 1.5% YOY uptick in ancillary revenue, TRevPAR realized another 2019 record with a 5.0% YOY upsurge.
This heightened activity was also reflected on the expense side. Led by a 5.9% YOY expansion of rooms labour costs, total payroll rose by 2.1% on a PAR basis compared to December 2018. Overheads were also part of this upward trend with a 3.1% YOY increase.
The end of year profitability boost was just what Mainland Europe hotels needed after a rather difficult first three quarters of the year. Still, GOPPAR for full financial year 2019 was 0.8% below that of 2018.
Profit & Loss Performance Indicators – Mainland Europe (in EUR)
KPI | December 2019 v. December 2018 |
RevPAR | +7.1% to €93.66 |
TRevPAR | +5.0% to €149.20 |
Payroll | +2.1% to €55.43 |
GOPPAR | +9.8% to €39.94 |
Budapest experienced a profit boost in the last month of the year, too. GOPPAR in the Hungarian capital recorded a staggering 35.6% YOY increase in December, the fourth month of double-digit YOY growth for this metric in the city in 2019.
Occupancy increased by 3.6 percentage points over the same period a year ago, while average rate did so by 12.2%. These strong results led to a lofty 17.6% YOY surge in RevPAR, the greatest one recorded in 2019. A 10.6% increase in ancillary revenue also contributed to a 15.3% YOY climb in TRevPAR.
Expenses were also up in December, highlighted by a labour cost increase of 5.5% YOY. Overheads were also up 3.1% YOY. Nevertheless, the expansion of the top-line drove profitability, and GOPPAR for 2019 in Budapest closed 2.9% above that of 2018.
Profit conversion in Budapest was recorded at 40.4% of total revenue in December.
Profit & Loss Performance Indicators – Budapest (in EUR)
KPI | December 2019 v. December 2018 |
RevPAR | +17.6% to €104.37 |
TRevPAR | +15.3% to €152.44 |
Payroll | +5.5% to €39.65 |
GOPPAR | +35.6% to €61.63 |
Meanwhile, Nice was not nice for hotels in December, as GOPPAR was down a staggering 65.4% YOY. Even though this is the fifth double-digit GOPPAR YOY fall in the city in 2019, it comes after seven consecutive months of profit growth.
Profit slumped despite revenue growth. RevPAR increased 13.0% YOY, driven by a 5.2-percentage-point increase in occupancy. Ancillary revenue, on the other hand, fell by 5.6% YOY, mainly due to decreases in F&B RevPAR (down 1.1% YOY) and Conference and Banqueting revenue (down 18.4% YOY). As a result, TRevPAR managed to climb by 5.5% compared to December 2018.
An upsurge in expenses, however, offset the growth in revenue, resulting in negative GOPPAR for the month. Overheads increased by 23.6% YOY, led by a 47.9% YOY upswing in utilities. Labour costs were also up 11.0% YOY. Despite this, GOPPAR for the 2019 financial year in Nice placed 4.5% above that of 2018.
Profit & Loss Performance Indicators – Nice (in EUR)
KPI | December 2019 v. December 2018 |
RevPAR | +13.0% to €51.77 |
TRevPAR | +5.5% to €80.86 |
Payroll | +11.0% to €68.98 |
GOPPAR | -65.4% to -€27.50 |